The IRS imposes penalties for underpayment if you don't withhold or pay enough taxes on income received during each quarter. Even if you paid your tax bill in full before the April deadline or if you receive a refund, you may be fined for underpayment. Here's what will happen and how your estimated overdue tax penalty will be calculated. The IRS will send you a notice if you underpaid the estimated taxes.
They determine the penalty by calculating the amount based on accrued taxes (total taxes less refundable tax credits) on your original return or on a more recent return you filed.
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